Snyder-Falkinham v. Stockburger, SNYDER-FALKINHAM

• Decision Date: 21 April 1995
• Docket Number: SNYDER-FALKINHAM,No. 940660,940660
• Court: Virginia Supreme Court
• Parties: Georgia Annev. Bruce C. STOCKBURGER, et al. Record

Page 36

457 S.E.2d 36

249 Va. 376

Georgia Anne SNYDER-FALKINHAM v. Bruce C. STOCKBURGER, et al.

Record No. 940660.

Supreme Court of Virginia.

April 21, 1995.

Michael S. Horwatt (Charles F. Wright; Michael Horwatt & Associates, on briefs), for appellant.

Frank B. Miller, III, Ronald D. Hodges (S. Vernon Priddy, III, Matthew J. Ide, Marshall H. Ross, Sands, Anderson, Marks & Miller, Wharton, Aldhizer & Weaver, on brief), for appellees.

Amicus Curiae: (Robert D. Benjamin, on brief), in support of appellant.

Amicus Curiae: (David Cohen, on brief), in support of appellant.

Present: All the Justices.

COMPTON, Justice.

In this dispute spawned from pending civil litigation, the questions on appeal are whether the trial court erred in ruling that the plaintiff agreed to a settlement of the underlying action and whether the trial court erred in holding that the plaintiff's trial attorneys had the authority to have the action dismissed with prejudice.

In November 1991, appellant Georgia Anne Snyder-Falkinham filed the underlying suit, a legal malpractice action, against appellees Bruce C. Stockburger, an attorney at law; Gentry, Locke, Rakes and Moore, a Roanoke law firm in which Stockburger was a partner; and certain other named partners in the law firm, seeking compensatory and punitive damages. The plaintiff asserted that, beginning in early 1980, an attorney-client relationship existed between her and defendant Stockburger. She claimed that this relationship evolved over the years "to the point where defendant Stockburger was providing legal and financial advice in all of the plaintiff's personal and business dealings."

She asserted that, with Stockburger's advice, she began a construction business that became involved in, among other things, residential housing projects in Blacksburg and Radford. She contended that she sustained actual losses of $6.7 million as the result of the defendants' alleged breach of fiduciary duties, professional negligence, and fraud and misrepresentation in handling her business affairs. In responsive pleadings, the defendants denied all the plaintiff's allegations of wrongful conduct.

As a January 31, 1994 trial date approached, defendant Stockburger, by counsel, moved that the case be referred to a dispute resolution evaluation session pursuant to Virginia's Dispute Resolution Program. Code §§ 8.01-576.4 to -576.12. The trial court granted the motion, referred the matter to such a session, and directed the parties to return to court on January 31 irrespective of the outcome of the referral.

The plaintiff and her trial attorneys, Thomas L. Rasnic and Roger E. Jenne; defendant Stockburger and his attorney; and the attorney for the other defendants appeared in Richmond on January 25 for a three-hour evaluation session. At the conclusion of the session, certain terms of agreement relating to the litigation and attributed to the plaintiff were recorded on a Mediation Memorandum of Agreement by one of the mediators.

Over the next several days, the parties continued to negotiate for a full and final settlement. On Sunday, January 30, the day before trial, the plaintiff, her trial attorneys, and the attorneys for the defendants engaged in extensive discussions in a Roanoke hotel. Late that evening, according to defendants, the plaintiff agreed to all terms of a proposed settlement, a fact that the plaintiff now denies.

The next morning, January 31, plaintiff's trial attorney Rasnic and one of defendants' attorneys went to the courthouse where the trial court entered two orders, each dismissing the underlying action with prejudice. The orders carried the endorsements of plaintiff's trial attorneys and the attorneys for the defendants. One order dismissed the law firm's individual partners, except Stockburger, and dismissed the claim for punitive damages. The other order was a general dismissal and contained a provision permitting a contempt citation for violation of the confidentiality portion of a "Mutual Release and Settlement Agreement."

Shortly after noon on January 31, plaintiff was called by one of her trial attorneys and was asked to come to Roanoke from her home in Blacksburg to execute the settlement papers memorializing the agreement. She told the attorney "that she was still thinking about" the settlement. Apparently, the plaintiff had consulted earlier that morning with another attorney, one of her present appellate counsel.

On February 3, 1994, both appellate counsel filed a praecipe noting their appearance as counsel for the plaintiff for the purpose of filing a motion to vacate the January 31 dismissal orders. Plaintiff's trial counsel then filed a notice and motion to withdraw as counsel for the plaintiff.

Plaintiff's appellate counsel then filed a motion to vacate the January 31 orders, and defendants' counsel filed a motion to confirm the settlement. On February 15, 1994, the trial court conducted a hearing on the respective motions, after entering an order relieving plaintiff's trial counsel as counsel of record.

Upon considering the testimony of 16 witnesses and reviewing numerous exhibits, the trial court, stating the decision involved a question of "credibility," found "as a fact that the plaintiff did agree to the terms of the settlement, and that the attorneys did have actual as well as implied authority to settle the case." We awarded the plaintiff an appeal from the February 15, 1994 order denying the plaintiff's motion to vacate and sustaining the defendants' motion to confirm.

On appeal, plaintiff assigns four errors. Two assigned errors invoke the provisions of Code § 8.01-576.10, which deals with the confidentiality of dispute resolution proceedings. As pertinent, the statute provides: "Any communication made in or in connection with the dispute resolution proceeding which relates to the controversy, whether made to the neutral or dispute resolution program or to a party, or to any other person if made at a dispute resolution proceeding, is confidential."

Relying on the statute, the plaintiff first contends that, during the February 15th hearing, the trial court erred when it admitted evidence of discussions and events which occurred in the court-ordered mediation proceeding bearing upon the question of whether the plaintiff's trial attorneys had authority to have her case dismissed with prejudice. Still relying on the statute, plaintiff next contends that the trial court erred by admitting in evidence the Mediation Memorandum of Agreement to establish the ultimate existence of a settlement agreement.

We do not reach for decision either of those issues because they are procedurally barred by Rule 5:25. As applicable here, this rule of appellate procedure provides that error will not be sustained to any ruling of the trial court admitting evidence unless the objection to such admission "was stated with reasonable certainty at the time of the ruling." Although admission of the evidence challenged in these two assignments of error was the subject of several objections by plaintiff's counsel during the hearing, not once did counsel cite to the trial judge or rely on Code § 8.01-576.10, or any other statute dealing with dispute resolution proceedings. Indeed, three days after entry of the February 15th order, plaintiff, by counsel, filed a ten-page Motion for Reconsideration, and did not mention any of the foregoing statutes. Thus, the trial court was never afforded the opportunity to address and rule on the issues that the plaintiff now raises, and we will not consider them for the first time on appeal.

The remaining assignments of error challenge the sufficiency of the evidence on proof of a settlement and on proof of the authority of plaintiff's trial counsel to move for entry of the orders dismissing the underlying action. Prior to a discussion of the evidence on those issues, a review of applicable, settled principles of law is appropriate.

"The law favors compromise and settlement of disputed claims." Bangor-Punta Operations, Inc. v. Atlantic Leasing, Ltd., 215 Va. 180, 183, 207 S.E.2d 858, 860 (1974). But the essential elements of a valid contract must exist to support a binding compromise settlement; there must be a complete agreement including acceptance of an offer as well as valuable consideration. Montagna v. Holiday Inns, Inc., 221 Va. 336, 346, 269 S.E.2d 838, 844 (1980). Ultimate resolution of the question whether there has been a binding settlement involves a determination of the parties' intention, as objectively manifested. Id.; Boisseau v. Fuller, 96 Va. 45, 46, 30 S.E. 457, 457 (1898).

An attorney at law, merely by virtue of being retained by the client, has no authority to compromise the client's claim without the latter's consent. Dawson v. Hotchkiss, 160 Va. 577, 581-82, 169 S.E. 564, 565 (1933). Nevertheless, the attorney has full authority to act on behalf of the client in the conduct of litigation before the court, including making admissions and factual stipulations. Harris v. Diamond Constr. Co., 184 Va. 711, 722, 36 S.E.2d 573, 578 (1946).

An attorney's general authority permits the attorney to discontinue a pending action by a dismissal without prejudice; but this general authority gives the attorney no right to discharge or terminate a cause of action by a dismissal on the merits, such as by a dismissal with prejudice, without special authority or acquiescence on the part of the client. Virginia Concrete Co. v. Board of Supervisors of Fairfax County, 197 Va. 821, 827, 91 S.E.2d 415, 420 (1956).

When a civil case is tried by a court without the intervention of a jury and, as here, a party objects to the decision on the ground that it is contrary to the evidence, the trial court's judgment will not be set aside on appeal "unless it appears from the evidence that such judgment is plainly wrong or without evidence to support it." Code § 8.01-680. The conclusions of the trial court under these...